Business Strategies and Multinational Companies

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Questions and Answers

What is one primary benefit companies gain from sponsorship?

  • Increased product pricing
  • Global brand visibility (correct)
  • Reduced production costs
  • Direct sales through media

In which market segment are special offers particularly popular?

  • Fast-moving consumer goods (correct)
  • Electronics
  • Luxury goods
  • Automobiles

How do companies typically use sponsorship to their advantage?

  • By linking with sporting events (correct)
  • By lowering their production quality
  • By improving employee satisfaction
  • By increasing retail prices

Which option is NOT a characteristic of price discounts and special offers?

<p>Permanent price reductions (C)</p> Signup and view all the answers

What is a common method companies use to enhance their brand exposure?

<p>Sponsoring sporting events (B)</p> Signup and view all the answers

What is one potential drawback of multinational companies?

<p>Exploitation of less developed countries (C)</p> Signup and view all the answers

Which of the following describes crowdfunding?

<p>A method for a large number of individuals to invest using an online platform (A)</p> Signup and view all the answers

What is one reason many companies develop into multinationals?

<p>Exploiting economies of scale (B)</p> Signup and view all the answers

What does retained profit refer to?

<p>Profit held by a business for future use (A)</p> Signup and view all the answers

Which of the following is a benefit of becoming a multinational business?

<p>Higher profile and greater visibility (D)</p> Signup and view all the answers

What is the classification of assets that are expected to be converted into cash within a year?

<p>Current assets (B)</p> Signup and view all the answers

How can multinational companies benefit a host country's economy?

<p>Increased tax revenue (B)</p> Signup and view all the answers

Which of the following represents liabilities in a business context?

<p>Details providing a source of funds for the business (A)</p> Signup and view all the answers

What advantage do multinational companies have regarding trade barriers?

<p>They can circumvent trade barriers (D)</p> Signup and view all the answers

What is one potential outcome of multinational companies operating in a country?

<p>Increase in income and employment (C)</p> Signup and view all the answers

Flashcards

Brand Sponsorship

A company links its brand with an event to gain publicity.

Publicity Gain

Increased awareness of a brand due to a sponsored event or activity.

Special Offers

Price reductions or promotions used to encourage sales.

Fast-Moving Consumer Goods

Products in high-demand, like groceries and toiletries.

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Price Discounts

A reduction in a product's price.

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Environmental Damage

Harm to the environment caused by multinational companies' operations, often a consequence of prioritizing profits over sustainability.

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Exploitation

Multinational companies taking advantage of workers or resources in less developed countries, often paying low wages or using unethical labor practices.

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Crowdfunding

A method of raising capital from a large number of individuals through online platforms, allowing for peer-to-peer funding.

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Retained Profit

Profits kept by a business instead of being distributed to shareholders, often used for future investments or expansion.

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Dividend

A share of a company's profits paid to its shareholders.

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Economies of Scale

Larger companies can produce goods at a lower cost per unit because they can buy materials in bulk and spread fixed costs over a larger output.

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Global Technical Superiority

Multinationals often invest heavily in research and development, allowing them to develop advanced technologies and gain a competitive edge.

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Avoiding Trade Barriers

By setting up operations in different countries, multinationals can avoid tariffs and other trade restrictions, making their products more competitive.

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Increased Tax Revenue

Multinationals operating in a country contribute to its economy through taxes on their profits, salaries, and other activities.

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Technology Transfer

Multinationals often bring advanced technologies and know-how to the countries they operate in, benefiting local industries and workers.

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